Unicom considers dropping subsidies

15 Aug 2012

China Unicom is considering cutting subsidies for devices due to weakening profitability, C114 reports, citing industry sources. In particular, Unicom is considering axing the subsidies on its range of CNY1,000 (USD157.85) smartphones from 50% down to 20%-30%. The reduction in subsidies would represent a significant change of direction for Unicom, which has kept device sales at the core of its marketing strategy. As noted by TeleGeography’s GlobalComms Database, Unicom utilises the W-CDMA standard for its 3G services whilst China Mobile uses the home grown TD-SCDMA platform and China Telecom CDMA2000. With a better supported ecosystem for W-CDMA technology than its TD-SCDMA rival, Unicom has used the greater range of devices available to drive 3G penetration and attract greater numbers of more lucrative data consumers. The tactic has so far proved successful, with the cellco punching above its weight in the 3G field. At end-June 2012, Unicom claimed 57.53 million 3G users, giving it a 32.8% share of the 3G market, compared to its 21.0% share of the total wireless market.

China, China Unicom